EMRA extends Maximum Settlement Price Mechanism


The Energy Market Regulatory Board extended the “Maximum Settlement Price Mechanism” application for another 6 months. Basically, the regulation, which foresees that some of the cost deficit of power plants generating electricity from high-cost sources will be met from low-cost power plants, was implemented for the first time in Turkey. The decision was announced with a written statement from EMRA.

In a written statement, EMRA Chairman Mustafa Yılmaz said, “Thank God, no power plant was shut down as a result of our first 6-month implementation and we did not experience supply security problems. However, the precaution should not be neglected. We will both preserve the free market structure and continue to take measures in line with the nature of the period we are going through. The closure of power plants that produce electricity at high costs due to rising raw material prices – which are a major source of employment – may disrupt Turkey’s security of supply. This can mean both a cost burden and possible downtime for our consumers. We cannot allow this. We will continue to observe the balance in our markets with the maximum settlement price mechanism.” made its assessment.

Some power plants that produce from renewable resources have requested that the application not be extended.

Emphasis on security of supply and consumer cost

EMRA Chairman Mustafa Yılmaz noted that the application is based on protecting consumers from high cost increases and ensuring supply security, and that some European countries have put on the agenda to implement similar mechanisms. Emphasizing that developments interpreted as a global energy crisis were observed after the Russia-Ukraine war, Mustafa Yılmaz said that the costs of imported products still maintain their high level and this keeps the market prices high. Defining the application as a “safety valve”, Mustafa Yılmaz said:

“The global energy crisis threatens Europe. This temporary mechanism, which we started 6 months ago, is being implemented by many European countries, especially England and Germany. With the decision taken by our Board, we will contribute to the supply security of the power plants that cannot produce for another 6 months, especially due to the increase in resource costs. We aim to protect our consumers from the increasing extraordinary cost increases. As an institution, we closely monitor input costs. We have reflected the changes in these costs to the maximum settlement prices. For example, there was a significant change in the price of imported coal, and we reflected this change in the form of lowering the maximum settlement prices. We will continue to follow the process meticulously.”

In the written statement, the maximum settlement prices (per MWh) were announced. According to this
4 thousand 500 TL for natural gas power plants, 2 thousand 750 TL for imported coal power plants, 2 thousand 50 TL for domestic coal power plants, 1540 TL for renewable resources.

In the statement, within the scope of the application, the difference between the prices in the free market and the maximum settlement prices will be collected in the resource-based support pool as the ‘support price’; It was noted that the income generated in this pool is used for the electricity consumption of all regulated consumers, and it is aimed to protect consumers from increases in the market.